Microfinance, providing financial services to low-income clients, has gained popularity in Ghana in the past 20 years and has played an important role in helping the poor - especially women - improve their lives. And the number of lenders providing small, short-term loans has multiplied. Many people in Ghana have a positive view of the easy access to loans that micro credit provides. But there is also concern that without better regulation, some microfinanciers can exploit customers who need such services the most.

Microfinance companies are classified as non-bank financial institutions by the Central Bank of Ghana. Under current regulations, they can mobilize capital by accepting deposits from individuals and small business ventures. They can also give short-term loans to their customers.

One such customer is Marian Kyei, a housewife with two children. She says these companies, also known as Savings and Loans Companies, offer a vital lifeline to her and other Ghanaians.

“I need a loan; I get it in 48 hours," she said. "You want a loan from a traditional [bank] you have to bring collateral, guarantors; you’ve got to bring all kinds of sureties. So when these companies came up, people jumped on board.”

The Bank of Ghana says that growth in micro lenders is significant, from 12 such companies in 2006 to 19 in just five years.

Liberalizing regulations has allowed this industry to grow with the need. But some here worry that without tighter oversight, fraudulent practices could increase and poor borrowers could be exploited.

Kyei says she would like to see the central bank do more than just grant licenses to micro lenders.

“I have not seen the Bank of Ghana come up with warnings to alert the public, who access these loans, to look out for specific things that will ensure that their monies are safe," she said. "Most of these businesses ask for advance cash before they can give loans. You look at the terms, it’s almost like a loan shark (fraudulent lender). Also, when people are unable to pay, what are the regulations that are in place to pay? Because like loan sharks, when people don’t pay they go through all kinds of means to get their monies back. ”

Kyei suggests the Central Bank could periodically publish names of businesses that are reputable.

Kofi Asare, a Ghanaian salaried worker, is also concerned about what he says are very high interest rates charged by microfinance companies.

“Most of them have compound interest, charging up to 10 percent every month," he said. "You can only make that much if you are doing buying and selling. But the over emphasis on buying and selling is not doing our economy any good. If those people continue that way, you encourage importation at the expense of production.”

But a microfinance manager in Accra, who asked to remain anonymous, defends his industry as good for small business and good for Ghana’s development.

“I come from a financial institution which has a very competitive interest rate. Initially, we were charging 4 percent and over [monthly] but now, it has come down to 3.5,” he said.

He says in addition, his company also gives business advice to people taking out loans to help them use the money successfully.

The government of Ghana has adopted microfinance as one of its strategies for reducing poverty. And most economic indicators suggest it is helping.